IMF Directs Pakistan on Fiscal Discipline: No Supplementary Grants Until New Government Formation

The International Monetary Fund (IMF) instructs Pakistan to refrain from approving supplementary grants until the post-election formation of a new government. In line with commitments under the Stand-By Agreement (SBA), the Finance Division issues directives to ministries, emphasizing the government’s pledge to avoid supplementary grants and adhere to approved fiscal levels in FY2023-24.

These commitments extend to refraining from introducing new preferential tax treatments, exemptions, and tax amnesties, along with a commitment to avoid subsidy or cross-subsidy schemes in FY24 and beyond. The Finance Division further instructs ministries to prevent proposals conflicting with these commitments from reaching competent forums.

The importance of these commitments is emphasized for achieving program targets and maintaining macroeconomic stability. Ministries are urged to disseminate IMF commitments to institutions under their control for compliance. The IMF’s directives underscore the significance of adherence to these commitments to uphold financial discipline and achieve macroeconomic stability.

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